In the 24 months since the previous report in Ardent Partners’ CPO Rising series was released, the world has seen the number and frequency of challenges facing procurement professionals accelerate at a staggering speed. From dramatic drops in air cargo capacity to difficulties in procuring materials and shortages of vessels and containers further compounded by Suez Canal blockage delays, enormous strain has been placed on global supply chains and the people managing them.
It’s of little surprise, then, that the insights shared by some 351 Chief Procurement Officers and other procurement and business leaders surveyed in Ardent Partners’ State of Procurement 2021 report (May 2021) reflect heavily of the sizable challenges caused by the pandemic and the ongoing uncertainty it has created for the industry. At the same time, the 16th annual report has a common thread of how procurement executives are seeking out bold and inventive ways for their business to thrive in this ‘new normal’. As the report states, “if procurement’s future points towards intelligence, agility and innovation, many CPOs have prioritized the tools, strategies and talent needed to get them there.”
Driving A Digital Transformation
Digital transformation has been firmly pushed to the top of the business agenda for organizations in the past year. Noted by the report is that a key driver for this change is procurement automation, with more than a third (34%) of executives surveyed prioritizing it over other foundational initiatives such as increasing savings and improving business intelligence with valuable data.
A complimentary priority to the adoption of automation tools in 2021 is a focus on streamlining and improving processes to help CPOs and their teams overcome some of the challenges created by a persistent lack of more modern enabling technology -- a hurdle signaled by a third of the market in the survey.
As we’ve seen with many Keelvar customers, AI-driven automation is particularly effective in supporting organizations looking to boost efficiencies and effectiveness in their sourcing processes during such disruptive times, with digital, automated tools enabling fewer employees to transact more significant volumes of tactical work. A critical component of Intelligent Automation solutions is sourcing optimization, and while it's is not quite mainstream in procurement just yet, Ardent Partners explain that the adoption of optimization-based sourcing tools has risen sharply over the past two years -- even becoming a more standard tool for sourcing teams.
Boosting Tech Adoption Rates
Despite survey participants showing strong interest in adopting more technology to plug existing gaps and improve operations in their departments, just 20% of those interviewed report using sourcing optimization currently, with another 33% planning to do so over the next 24 months.
Having demonstrated one of the strongest returns on investment for customers, sourcing optimization may represent ripe “low hanging fruit” for procurement to drive both near-term and long-term benefit in financial and productivity savings.
With technology identified by Ardent Partners as the default process for procurement teams going forward and automation tools gaining significant traction with executives looking to build long-term success into their strategies, the report recommends taking advantage of the ample opportunities to implement technology deployment projects that could “help scale a procurement operation and maximize its impact and performance.”
For sourcing professionals who are looking into a re-evaluation of their e-sourcing tools or to scale up their optimization-based sourcing, our expert team can help you with your research into these solutions, and even demonstrate with your own data as you build your business case.
In the meantime, download a complimentary copy of Ardent Partners’ new report CPO Rising 2021 - The State of Procurement and the CPO, and uncover more industry insights for 2021. Keelvar is proud to be among the sponsors of this year’s report.